Renaissance Cruises' sudden close shocks travel industry insiders

The Sept 26 announcement by Renaissance Cruises that it was filing for Chapter 11 bankruptcy and immediately ceasing operations came as something of a surprise to many travel industry observers. As a member of the 23-cruise line trade group CLIA, Renaissance was the world's fifth-largest cruise company. According to Renaissance President and CEO Manfred Urpsprunger, the unexpected drop in leisure travel after the Sept 11 terrorist attacks had an "immediate and adverse impact" on the company's recapitalization efforts.

Renaissance has been viewed within the industry as a weak but dangerous competitor because of the newness of its fleet and its price structure, which was often far below the market. Its cruise product was considered good, but sat the prices offered by its competitors, Renaissance said it could not make money.

The abrupt move sent the10 ships in Renaissance's fleet directly to port, and arrangements are being made to return any passengers who were either on a cruise or in transit to a cruise back to their port of embarkation. Customers who have made deposits on future Renaissance sailings are being directed to contact their travel agent or credit card company for refunds. Travelers who have purchased trip insurance may also be able to get refunds for airfares and other arrangements made in conjunction with a future Renaissance cruise.

Some observers are also concerned that Renaissance may not be able to repay millions of dollars it has already collected in passenger deposits. Unlike most U.S.-based cruise lines, it does not sail ships from U.S. ports and so has not posted the customary $15 million bond with the U.S. Maritime Commission to protect cruise passengers.

While aggressive building of new ships has resulted in intense competition among cruise lines, not all have been affected equally by the recent events. Carnival Corporation, the world's largest cruise company, which operates 43 ships including Carnival, Holland America, Windstar, Seabourn, Costa and Cunard lines, reported a 97 percent occupancy for the week of Sept 19.

Those with questions regarding the Renaissance bankruptcy are being directed to the company's Web site, www.renaissance.com or 800-525-5350, although no additional details were available as of press time.